Ford Launches New Autonomous Vehicles LLC Business

Ford has committed $4 billion to developing self-driving technology and jump-starting a business that revolves around automated vehicles.

Starting about the time it made a billion-dollar investment in Argo AI during the spring of 2017, the company made internal plans to spend an additional $3 billion through 2023 to get a business revolving around automated vehicles off the ground.

Ford executives revealed the cumulative financial figure Tuesday as the company’s self-driving-vehicle efforts reached a new milestone: The company has spun several of the businesses into their own subsidiary called Ford Autonomous Vehicles LLC.

That business is designed to take third-party investments, much like the $2.3 billion SoftBank invested in Ford rival Cruise Automation in May, a move that showcased the rising valuations of companies at the forefront of automated-driving technology.

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The LLC will be based in the former Michigan Central Station building, which Ford purchased last month. Located in the heart of Detroit’s Corktown neighborhood, the station has come to symbolize both the depths of Detroit’s economic downfall and, now, the promise of a more prosperous future for the city.

Sherif Marakby, previously vice president of autonomous vehicles and electrification at Ford, has taken on the new title of chief executive officer of Ford Autonomous Vehicles LLC.

Created in December 2017, the LLC will hold Ford’s investment in Argo AI, a Pittsburgh-based startup that’s building the virtual driving system that will serve as the brains behind Ford’s automated vehicles. In addition, the new company will include aspects of the business that were part of Ford proper, including its efforts to develop a new vehicle platform for automated vehicles, user experience teams, advanced engineering, and its automated transportation-as-a-service-network research unit.

“Now is the right time to consolidate our autonomous-driving platform into one team to best position the business for the opportunities ahead,” Ford president and CEO Jim Hackett said in a written statement.

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In the near term, those efforts include a pilot project in Miami, Florida, involving self-driving delivery services. In 2021, the company intends to launch commercial service in that city.

By the end of 2018, Ford plans to announce the second city in which it will launch commercial operations, a spokesperson told C/D on Tuesday. Ford isn’t announcing that location yet, but, like other autonomous-vehicle operators, it’s expected to select a North American city with a temperate climate.

Ford is also working on building a new vehicle platform for its businesses predicated on self-driving systems. There’s no official timetable for the unveiling of that vehicle. Part of the remaining $3 billion Ford is spending on autonomous development includes the cost of that development, although a Ford spokesperson did not break down the specific amount targeted for that effort Tuesday.

That $3 billion does not include a further ownership stake in Argo AI, but it does include funding to help the startup hone the virtual-driver system, as well as funding of further efforts to examine the transportation-as-a-service platform and costs associated with establishing footprints in Miami and an unnamed second city.

Fairly or not, there have been perceptions among investors and business analysts that Ford’s automated-driving efforts have lagged competitors in recent years. If anything, the creation of the LLC has clarified exactly where Ford is placing its bets.

Establishing the company, the Ford spokesperson says, has always been part of the company’s strategy. “This is something we always planned to do,” he said. “This is how we want to grow the business.”